Expected to contribute $1.2 billion in revenues in 2019, up from $794
million generated in 2014; RTI’s profitability expected to reach 25
percent EBITDA margin in 2019, up from 14.5 percent in 2014

Strong annual global aerospace market growth of 5 to 6 percent; 9-year
production order book for commercial jets

NEW YORK & PITTSBURGH — (BUSINESS WIRE) — March 9, 2015 —
Lightweight, high-performance metals leader Alcoa (NYSE:
AA) is
announcing another major milestone in its transformation, further
building its value-add portfolio for profitable growth. The Company has
signed a definitive agreement to acquire RTI International Metals, Inc.
(NYSE:
RTI), a global supplier of titanium and specialty metal products
and services for the commercial aerospace, defense, energy and medical
device markets. Alcoa will purchase RTI in a stock-for-stock transaction
with an enterprise value of $1.5 billion.

With RTI, Alcoa will grow its value-add businesses and further
strengthen its aerospace portfolio. RTI will expand Alcoa’s range of
titanium offerings and add advanced technologies and materials,
increasing the Company’s position as a leading industrial innovator.

“Innovation and scale are critical to winning in both the titanium and
aerospace industries today, which is why this transaction is such a
natural strategic fit for both RTI and Alcoa,” said Dawne Hickton, Vice
Chair, President and Chief Executive Officer of RTI International
Metals. “We are pleased to have an agreement with Alcoa that delivers
immediate value to our shareholders that appropriately reflects the
strength of our business. Through this combination of forces, RTI will
take its innovative technologies to the next level and deliver even more
value-add titanium solutions to meet customer needs. We look forward to
continuing to accelerate RTI’s success as a part of the Alcoa team.”

Under the terms of the agreement, Alcoa will acquire all outstanding
shares of RTI in a stock-for-stock transaction. RTI shareholders will
receive 2.8315 Alcoa shares for each RTI share, representing a value of
$41 per RTI share based on Alcoa’s closing price on March 6, 2015. The
transaction has an enterprise value of $1.5 billion, including $330
million of RTI cash on hand and up to $517 million in RTI’s convertible
notes.

Transaction Benefits

The acquisition will offer Alcoa financial benefits with realized net
synergies of about $100 million in 2019, primarily driven by procurement
and productivity improvements, leveraging Alcoa’s global shared services
and driving profitable growth. Alcoa expects RTI to contribute $1.2
billion in revenues in 2019, up from $794 million generated in 2014,
with 65 percent of revenues supported by contracts over the next five
years. RTI is expected to reach profitability of 25 percent EBITDA
margin in 2019, up from 14.5 percent in 2014.

This transaction is expected to enable Alcoa to capitalize on strong
growth in the commercial aerospace sector. Alcoa projects a compounded
annual global aerospace market growth rate of 5 to 6 percent through
2019 and sees a current 9-year production order book for commercial jets
at 2014 delivery rates.

Eighty percent of RTI’s revenues in 2014 were from the aerospace and
defense industries, with the balance mainly split between other markets
including energy and medical devices, complementing Alcoa’s growth
markets.

Strategic Rationale

RTI brings proven midstream and downstream capabilities in titanium, the
world’s fastest-growing aerospace metal. Spending on titanium aerospace
mill products is expected to grow by about five percent annually over
the next five years driven by high-growth, next-generation aircraft
programs. RTI’s titanium operations span midstream processes such as
melting, ingot casting, bloom, billet, plate and sheet production; and
downstream extrusions for aerospace, oil and gas applications, high
speed machining, and production of integrated subassemblies primarily
for aerospace. These capabilities complement Alcoa’s titanium investment
casting and forging capabilities, and will enable a value-creating
closed titanium scrap loop. RTI will increase the percentage of Alcoa’s
non-aluminum downstream revenues to 64 percent of total downstream sales.